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Koito To Ignore Pickens Even After Stake Increase With AM-BAT, Bjt

September 21, 1989

TOKYO (AP) _ Koito Manufacturing Co. said Thursday it will not give T. Boone Pickens Jr. more power just because he is increasing his stake in the Japanese auto parts supplier to 26 percent.

But the company, which Pickens has railed against for repeatedly refusing him a spot on its board, said the larger ownership by the American takeover specialist could threaten its position on the Tokyo Stock Exchange.

Pickens said Wednesday in Washington that his Boone Co. - Koito’s largest shareholder - was buying another 10 million shares above the 32.4 million it currently holds but has no plans to mount a takeover battle.

He said he expected to request a special Koito shareholders’ meeting in early October.

″We just don’t have to allow Pickens to have seats on our board even though he increases the stake from 20.2 percent to 26 percent,″ Koito spokesman Mikio Tsuruta said. ″There is no such law.″

Tsuruta also said Pickens could not request a shareholders meeting until at least the end of September. To make such a call, a shareholder must hold more than a 3 percent stake for at least six months.

″We haven’t even been notified anything about this from Pickens’ side,″ he said. ″The deal is strictly between Pickens and the Azabu Group, which has nothing to do with us in the first place.″

Azabu, a large Japanese car sales and real estate concern, owns about 10 percent of the shares in Koito, an automobile lighting company closely associated with Toyota Motor Corp.

Additional purchases by Pickens could endanger Koito’s position on the Tokyo Stock Exchange’s first section, which permits stock dealing on a credit basis and makes raising capital easier.

″How come Pickens has to do this to us? It wouldn’t be good for any of our shareholders, even including Pickens,″ Tsuruta said about about the danger of falling to the exchange’s second section.

A dealer for Nomura Securities Inc. said Pickens’ increased stake could pressure Koito into a compromise allowing Pickens to name executives to play a leading role in Koito management.

Koito would fall from the first section if its top 10 shareholders’ total stake exceeds 80 percent. The top group, including Pickens at 20.2 percent and Toyota at 19 percent, now holds a total 67 percent stake. Pickens’ new purchases would boost the level to 73 percent.

In addition, a company is supposed to have at least 3,400 shareholders to qualify for the first section, while Koito now has 3,120, Tsuruta said, who charged that a stake increase by Pickens would scare off other potential shareholders.

Noting that Toyota has three representatives on Koito’s board, Pickens said he and Boone Co. have been ″denied our rights because we are Americans.″

″Not only do they want to keep out Americans from participating in Japan’s economy, but they also don’t want the Japanese public to see how their closed corporate structure benefits a few elites to the detriment of the public,″ he said Wednesday.